Even if you are new to binary trading, you have probably already heard the terms “Bull Market” and “Bear Market”. These expressions may sound confusing for a newbie, and they appear in other trading markets as well. In this article, we will deal with explaining these two markets and helping you use them in your binary trading.
Where do these terms come from?
The expressions “Bull market” and “Bear market” were originally used in Forex trading. These two expressions may sound a bit odd when you hear them in the context of trading and finance. However, when we tell you they are metaphorical and symbolic, and explain what they represent, they will sound perfectly logical.
Whether the market is “Bull” or “Bear” depicts the movements on the market, and it is described by these animals attacking their opponents. Bull attacks by thrusting the horns up in the air, while the bear will hit an opponent by swiping the paw down. This means that bullish market is the one where the trend is rising, and bearish market is the one where it falls.
How you can use Bear and Bull market in binary trading
Forex traders were the first to use these terms to describe the market conditions. In this type of trade, it referred to the trends on the stock market. Binary trading allows you to trade different types of assets, such as stocks, commodities, currency pairs and indices. This means that you can apply the Bull-Bear distinction to any of these markets. Check out http://10bestbinaryrobots.com/ .
Automated trading robots, like Online Wealth Market and similar ones, also follow these trends. They observe them and base all their trades on them. It is also what every trader should do in order to increase success in manual binary trading.
When the market is bullish, it means that it is on the rise. This means that the prices of assets keep growing and that you can expect this trend to go on for a certain period of time. You can detect the Bull trend in various markets: the price of commodities and stocks is on the rise, major stock indices perform better, and the national (main) currency is increasing. When binary traders detect Bull trend in any of the markets, this tells them that they should CALL options they trade. If they call options during the bullish trend in the market, they are more likely to end the trades in the money.
Bear market is the opposite of Bull market, as you could conclude earlier. When the market is bearish, this means that the prices are getting lower and that this trend is likely to last for a while. The prices of commodities and stocks decrease, as well as the value of the main currency. When this trend is in place, this is an indicator for the traders to PUT the options they trade, because they predict that the prices will fall.
Knowing whether the market is bullish or bearish can help you a lot in binary trading. In order to determine whether Bull or Bear market is in place, you need to carefully observe the changes and trends in the market, follow the charts and analytics and draw conclusions on these facts.